Walmart is already using its deep pockets to help recent acquisition Jet.com compete with Amazon in online apparel.
Walmart on Thursday announced it acquired Boston-based ShoeBuy, a competitor of Amazon-owned Zappos, for $70 million to help Jet beef up its shoe game. ShoeBuy, which was founded in 1999 as one of the first companies to sell shoes online, will remain independent and CEO Mike Sorabella will stay on.
Prior to the purchase, ShoeBuy was owned by IAC, a New York-based media company whose chairman is Expedia chairman Barry Diller.
Walmart purchased Jet in August for $3.3 billion.The deal combined an ambitious e-commerce startup with a physical retail giant, both of whom have struggled to dent Amazon’s online business on their own. ShoeBuy’s inventory of more than 1 million items spread across 800 brands, including shoes, clothing, accessories and bags, will help bolster Jet’s presence in the apparel arena.
The clothing market is highly fragmented, with 45 percent of all sales coming from outside the top 15 players in the industry, according to a recent report from Cowen & Co. That leaves room for Walmart-Jet to make a move in the industry, but Cowen sees Amazon becoming the top clothing retailer in the U.S. this year.
Just in the last couple days, it has come out that Amazon is looking at creating its own line of activewear, and the online retail giant is among those interested in acquiring bankrupt retailer American Apparel.